Why Comp is Surging for Digital Infrastructure Investors and Operators

Investment roles within the digital infrastructure asset class have seen among the most dramatic rises in compensation on Wall Street, thanks to a surge in demand for data centers and a limited supply of "plug-and-play" talent, according to Patrick Reyes, a Principle at One Search, an executive recruiting firm focused on infrastructure. A managing director in charge of digital infrastructure firm may be offered upwards of $1.5 million per year in cash compensation, and carried interest with a notional value "well into eight figures," says Reyes. Because of the relative nascency of the asset class, professionals with backgrounds in adjacent industries are being recruited to "build up" digital infrastructure, spelling opportunity for executives in the real estate, industrial and energy sectors. Reyes notes that, in addition to the all-important ability to source transactions - often from large tech and telecom companies - the digital infrastructure asset class has great demand for investors, including CFOs, with "strategic" capabilities and mindsets. Another important talent trend can be found among operating executives in the data center industry, who increasingly are being approached by private equity firms to who want to raise hundreds of millions, even billions, in capital for innovative, new digital infrastructure strategies, but lack the right teams to put the capital to work. These operator are often pleased to find that compensation structures in private capital are more directly tied to their accomplishments than are comp packages at publicly traded companies, says Reyes. Reyes says: "I kid you not. . . at least once a week, I've got a conversation going with somebody who sits in digital infrastructure private equity, and they say to me, 'Hey Pat, if you know somebody, or a team, that does XYZ in the data center space, let me know. I'd love to meet them, because that is the type of business model that we could put hundreds of millions, if not not billions, into.'" In the war for talent, Reyes notes that energy transition and digital infrastructure firms have been poaching talent from one another, as the energy and digital infrastructure industries converge. "The future data center will look like a power plant, and the future power plant will look like a data center," says Reyes. CHAPTERS 02:00 Allocations to digital infrastructure driving growth 03:50 The connection between energy talent pools 05:23 Creative thinking in high demand 06:53 The ability to source is paramount 10:45 Verifying track record 11:47 Investment bankers turn investors 13:20 When operators join PE 17:18 Opportunity is outstripping talent 19:10 Adding talent to the market 20:04 Transplanting real estate, industrial talent 21:31 Compensation is accelerating 25:18 Cash comp, bonus, carry 27:36 Power procurement in short supply Cool Vector website: https://coolvectormedia.com/